Expatriate and Seafarers Tax


At TaxSavers we can provide advice on the Income Tax, Capital Gains Tax and Inheritance Tax consequences of leaving the UK, both for the short and the long term. We can also assist with helping to establish your tax-residency and domicile position, both of which have a direct bearing on how you are taxed in the UK after leaving.

If you are leaving the UK to work abroad, it can often be advantageous to be classified as ‘non-resident’; as this can ensure that overseas employment earnings remain outside the scope of UK tax. HM Revenue & Customs determine residency on the basis of the ‘statutory residence test’, and many situations which appear to clearly make one non-resident, may not be as straightforward as they initially seem.

Ensuring a non-resident classification for tax purposes, can often involve needing to comply with various limits on the number of days you can spend in the UK for example, together with other criteria specific to each individual situation. We are able to offer advice on these matters, so you can be clear on the exact requirements that apply to you as an individual, and as such minimise the risk of falling foul of HMRC’s legislation.

We can also advise on the destination country’s tax legislation and how this interacts with the UK tax rules; and provide tax planning advice to maximise the tax benefit of periods of non-residency.

Many individuals leaving the UK for the short term will choose to rent out their own home while they are away. We can offer advice on how best to structure this letting, and help you comply with HMRC’s ‘non-resident landlord scheme’. We are also able to offer a tax return completion service for expatriates who retain the requirements for a UK tax return; all of which can be dealt with remotely via email at your convenience.

Seafarers Earnings Deduction

If you’re a seafarer being paid by a UK company, it’s likely that full UK tax is being deducted from your wages via the PAYE system. If you routinely undertake international voyages for much of the year, then Seafarers Earning Deduction (SED) may apply. This deduction can reduce your UK tax liability significantly, and result in a tax refund from HMRC; potentially up to 100% of the tax deducted at source.

In prior years, SED was only available to seafarers resident in the UK; however from 6th April 2011 the deduction became available to all residents of the European Economic Area. As a result, if you meet the relevant conditions you could be eligible to claim a significant refund.

If you don’t qualify for SED, but you’re not resident in the UK; you may still be due tax rebate in respect of your residency status, in the same way as an individual moving abroad for employment.

To learn more about your tax entitlements, call Charlotte Halsall on 01454 856010 or e-mail her at chalsall@taxsaversdirect.com for more information.